UK: Battery Storage Receives A Boost In National Grid Consultation

National Grid is seeking views on how best to facilitate the
evolution of future balancing services markets.

A key driver for change is the changing energy mix, with an
increasing proportion of the UK's demand for energy being met
by wind, solar, biomass and hydro power sources. In addition, the
requirement for cost-effective flexibility in delivery means that
the current position cannot continue.

The National Grid has invited the energy storage market to
comment on its 'systems needs and product strategy'
consultation, before it announces its new balancing services
strategy in September 2017.

Last year's National Grid tender for EFR was significantly
oversubscribed with more the 1GW of capacity involved in the
bidding. The tender results only saw 200MW of contracts awarded to
large-scale battery storage projects.

The market has been anticipating that a second EFR tender would
be launched later this year, however it now looks as though this
will be rolled into a wider frequency response market.

In a bold step which could herald the simplification of the
revenue streams derived from providing balancing services, National
Grid is proposing to combine the Enhanced Frequency Response (EFR)
and Fast Frequency Response (FFR) tenders into a new frequency
response product, which it will look to launch in March 2018.

They are also proposing to remove obsolete products, standardise
the way in which contracts work, improve market information and
trial new procurement methods.

Other proposals in the consultation include:

Developing a new frequency response
product which will take into account the value associated with
resolving system inertia.

The launch of a new reserve power
product in 2018/19.

The launch of a new reactive power
market by the end of 2018/19.

The review of contract terms to
ensure that they are suitable for all technology types that could
provide the service.

The development, and publication, of
a restoration strategy for black start programme later in this
summer.

The consultation document recognises the need for change within
the National Grid's current balancing services. A number of
concerns around accessibility, future proofing, the complicated
nature of services and investor confidence in long terms plans,
have prevented many involved in the sector from making informed
decisions. The consultation aims to positively address these
issues.

Maria Connolly, Head of Energy & Renewables and Real Estate
at TLT, said: "The recent National Grid, EFR and Capacity
Market auctions demonstrate the key role there is for energy
storage to play in balancing the country's power needs and
positively reducing the impact renewables technologies can have on
the grid. The proposals certainly have the potential to drive
the uptake of energy storage, and will be welcomed by battery
storage developers as a positive move to simplify a market which
has become increasingly complicated over the years."

Responses to the consultation should be provided by 18 July. A
further paper will be published in July, in which National Grid
will be putting forward its thoughts on whole system optimisation
and the creation of new markets for constraint management. We will
report on that when it comes out.

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